1099 Forms Articles

1099 Forms for Contractors and Freelancers

Independent contractors are not employees, so nothing is withheld from what they are paid. Instead the payer reports the total on a 1099 and the contractor handles income tax and self-employment tax directly. Knowing which form applies, and to which payments, is what keeps that process from going wrong.

Form 1099-NEC covers nonemployee compensation, the form most freelancers receive. Form 1099-MISC covers rents, prizes, awards and other miscellaneous payments, and the two are regularly confused.

Contractors still need proof of income even without a W-2, which is what contractor pay stubs are for. To see how contractor reporting differs from employee reporting, compare with W-2 Form, and for income calculations used by lenders see Finance.